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We are all connected now, aren’t we? Internet connectivity is simply an essential in a globally connected economy. Large enterprises know this, and have long had the wherewithal to integrate networked applications into their business operations. (At SNG, we talked about this integration as “e-solutions.”) Of course, the increasing availability of affordable broadband Internet access has opened up the same opportunities for small and medium enterprise (SMEs). So, why are many SMEs still unable or reluctant to take on e-solutions? We would like to share a few ideas.

Of course, there are always the (not so) early (by now) adopters. Where broadband is available, a good number of SMEs do not need a lot of convincing about the cost-benefit of taking service – whether it be via DSL, cable, fiber, or wireless access. For them, higher connection speeds speak for themselves: no need for a complex business case to prove that being able to do the same things faster and more efficiently improves productivity; or that having an affordable ‘always on’ connection can save on phone connection costs or expensive T1 circuits.

by Gary Dunmore

And beyond the day-to-day efficiencies, there are the things they couldn’t do before broadband, such as: the promotions company that couldn’t transfer artwork files quickly between its offices and remote contract artists and was spending a fortune on time and costs of transportation; or the precision machining company that needed to be able to receive and send complex drawings online simply to be “eligible” to bid for major clients’ business. In fact, SNG research shows that over 60% of SMEs rate broadband as very important for making everyday operations easier and allowing them to make more effective use of resources.

However, more than 50% of SMEs have not (yet) internalized how broadband can increase revenues, reduce costs, or evolve how they do business. Here is the real challenge: why are so many SMEs still not taking full advantage of what broadband can offer?

Answers

Looking “inside” the businesses themselves can help. Firstly, some business owners don’t recognize the benefits of broadband. When it comes to “technology and the connected economy,” they often “don’t know what they don’t know” – and they have limited time or resources to figure it out. And, if the case isn’t made in terms of savings, growth or competitiveness they don’t allow much time for convincing. Also, there is often an assumption by business owners that implementing e-solutions requires technical know-how, or is something a small business cannot afford to implement or maintain. In fact, our research tells us that over

two-thirds of SMEs view the cost of development and maintenance and their lack of internal expertise and knowledge as important barriers to adopting e-solutions.

A different angle

We believe that SME owner-managers need to be enlightened about the transformative effects of technology, and the significant benefits they could reap from jumping on the broadband train. Without the jargon, they need to be informed about what happens when technology intersects with business processes; when it becomes possible to do different things and do things differently – creating new operating models and new business opportunities. This is the e-solutions moment. Rather than about speed and bits, business owners should think about “any business activity that can leverage the power of the Internet.”

Beyond e-commerce, SMEs should get a stronger, better feel for the opportunities that connectivity offers to transform how they conduct business (increased market reach, easier processing of orders, cheaper product delivery, smoother – when done right – customer service and technical support, etc.). Business owners, especially those who don’t want to sell online, need to be told about the good news – that there are many affordable e-solutions available online for them – and solutions that don’t need to be complicated to have big impacts, such as: sales force management and CRM tools to more effectively generate revenue, collaborative networks to enhance internal and external interactions and sharing, online national and global supply chain networks to uncover new opportunities, or remote access and tele-working packages to extend out-of-office reach. And of course, because not all solutions are applicable (or important, or useful, or affordable…) for every business, owner-managers need support in navigating through the mass of information, and in figuring out the “what works for my business; what solutions are appropriate; where is the greatest benefit; what should be done first, and what later?” questions.

An important focus

We know because we have been there too: support organizations have long had a hard time convincing the reluctant owners to act. However, we believe that the time has come when many SMEs will be receptive to effective support to find that intersection between technology and their business that works for them – provided it’s done without adding excessive burden that detracts from their business focus. Because making such support available to SMEs is as important as making broadband available in the first place it is becoming an urgent priority for public policy. Let’s keep in mind that that SMEs are a key engine for employment and economic growth (95% of businesses have less than 50 employees). More SMEs adopting e-solutions, enabled by broadband, improves growth, productivity, and competitiveness, with positive effects not only for SMEs but also for their communities and the economy overall. After all, that’s what sustainable adoption is all about.

Our star guest Larry Strickling recently expressed his confidence that broadband service providers will not only provide the detailed supply data requested by his agency (which includes more data elements than has ever been provided for a broadband mapping project), but also that they would waive the confidentially provisions that keep this data from being associated with specific companies. Though we certainly hope Mr. Strickling is correct, we don’t believe this will happen. And, just in case we are right, we recommend that states be ready to gather as much broadband data as they can – without relying too much on carrier cooperation.

We suggest a two-pronged approach. On one hand, states should work closely, in good faith, with carriers to develop ways in which they can provide the data elements set forth in the NOFA while preserving their confidentiality.

However, we warn states against becoming too dependent on carrier cooperation in the design and execution of their broadband mapping programs.

The reason: carriers may perceive the public interest goals of NTIA’s broadband mapping effort as too much at odds with their own self interests. Because the truth is: these companies are run to maximize shareholder value—not the public interest.

On the other hand, states need to build their mapping programs to include a strong multi-source data collection process that not only satisfies NTIA’s requirement for verification of carrier-supplied data, but also can “fill-in” for that data if carriers are either unwilling or unable to provide it. That’s what we call an “augment and verify” strategy.

Isn’t that what Strickling means when he says that if carriers refuse to comply, “There are other ways to collect this [data]: there are survey techniques and other ways to collect this information short of the carrier”? “We have appropriated $350 million” to this task, he continues, and “we are expecting the states to be creative, to be collaborative, to work together, and to find some new ways to collect the data, whether or not it is supplied by the carrier.” And he concludes: “Once that is made clear to [the carriers] at the most senior levels, then this thing will work itself out.”

It’s not so simple…

That’s where we beg to differ. Our guess is that, if we just hope “this thing will work itself out,” it probably won’t – because carriers have decades of practice in stonewalling to get their way. However we agree that, as Strickling suggests, the best way to get carrier cooperation may very well be for each state to gather as much broadband data as it can without relying on them, while continuing to invite their cooperation in a shared national effort to serve the public interest.

We strongly believe that if we heed Strickling’s invitation to be creative and collaborative and “work together… to find… new ways to collect the data,” things may work out just fine mapping efforts can succeed. The choice is up to state decision makers as they evaluate their options in the next two weeks. Our suggestion: work respectfully with carriers to obtain their data on mutually acceptable terms, but also augment and verify.

Speaking at the recent Virginia Summit on Broadband Access, NTIA administrator Larry Strickling expressed confidence that broadband service providers will not only provide the detailed supply data requested by his agency, but also that carriers would waive the confidentially provisions that keep this data from being associated with specific companies.That sounds like a pretty “audacious” hope to me, though I certainly hope Mr. Strickling is correct. But, just in case he isn’t, we at SNG suggest that states be ready to put together as much broadband data as they can without relying solely on carrier cooperation.

States and their broadband mapping contractors should, of course, work closely and in good faith with carriers to negotiate agreements and develop systems so carriers can provide the data elements set forth in the NOFA on terms that adhere to the document’s confidentiality provisions and that carriers find acceptable.

But we don’t think it’s wise for states to rely solely on carrier cooperation in the design and execution of their broadband mapping programs. As the NOFA makes clear ( see pg. 45), NTIA is asking for more detailed data than has ever been provided for a broadband mapping project. The extent to which carriers will provide this data remains at best an open question.

NTIA administrator Larry Strickling (again…) is wrong: carriers shouldn’t be trusted – certainly not to share broadband data. That’s because you shouldn’t rely on carriers to agree to serve the public interest. Not that they are inherently bad corporate citizens; but because carriers’ interests and the public’s interest are not aligned. And never will be. Consequently, carriers are never going to take steps that would entail favoring the public’s interest over theirs. It’s just plain logic; economic logic – unencumbered by the hardcore free-market ideology that telecom lobbyists always talk about.Let’s look at the facts. To put it simply, free markets don’t quite work in the broadband world.

At SNG, we can provide a full mapping solution that meets NTIA requirements. Or, for States that are undertaking their own mapping project, we can provide enrichment and verification. Our mapping solutions have the two key characteristics: multi-source, independently verified mapping and integration of supply and demand data. Let’s discuss each point below. If you’re in a hurry click here to download the 3-page description of our offer. Also, we’d like to know what you think of this approach: please tell us!